Krugman’s blog, 10/21/14

October 22, 2014

There was one post yesterday, “Fly the Derpy Skies:”

Last night Atif Mian and I flew up to Boston for a conference — and as I slid into my seat, who should I see staring at me but Ron Paul. It turned out that all of the seatback screens in the plane were showing Newsmax TV — who knew there was such a thing? Is it there to serve people who find Fox News too liberal? — and as best I could tell from the visual context (the sound was blessedly off), the elder Paul was lecturing us about monetary policy.

This sort of thing is obviously an important part of the reason we’re living in an age of derp. Events and data may have made nonsense of claims that the Fed’s policies would inevitably produce runaway inflation, and made those insisting on such claims look like fools; but there’s a large audience of people who, pulled in by affinity fraud, live in a bubble where they never hear about such evidence.

Truly, we live in a world in which people feel entitled not just to their own opinions but their own facts.

From the title I’m guessing he was flying United, but I do wish he had told us what airline he was on…

Friedman and Bruni

October 22, 2014

In “Putin and the Pope” The Moustache of Wisdom muses about two leaders with a lot of influence who matter in very different ways.  Mr. Bruni, in “Capitalism’s Suffocating Music,” says corporate sponsors have turned every last place and personage into ads.  Here’s The Moustache of Wisdom:

Reading the papers these days I find that the two world leaders who stir the most passion in me are Pope Francis and Vladimir Putin, the president of Russia. One is everything you’d want in a leader, the other everything you wouldn’t want. One holds sway over 1.2 billion Roman Catholics, the other over nine time zones. One keeps surprising us with his capacity for empathy, the other by how much he has become a first-class jerk and thug. But neither can be ignored and both have an outsized influence on the world today.

First, the pope. At a time when so many leaders around the world are looking to promote their political fortunes by exploiting grievances and fault lines, we have a pope asking his flock to do something hard, something outside their comfort zone, pushing them to be more inclusive of gays and divorced people.

Yes, Francis was rebuffed by conservative bishops at a recent Vatican synod when he asked them to embrace the notion that “homosexuals have gifts and qualities to offer to the Christian community,” adding, “are we capable of welcoming these people, guaranteeing to them a fraternal space in our communities?”

But, as an editorial in this paper noted: “The very fact that Francis ordered church leaders to address these challenges seems a landmark in Vatican history.” The pope asked that rejected language be published for all to see, while also cautioning against “hostile inflexibility — that is, wanting to close oneself within the written word, and not allowing oneself to be surprised by God.”

“Hostile inflexibility?” Whose leadership does that describe? Look at Putin’s recent behavior: His military was indirectly involved in downing a Malaysian airliner over Ukraine and his K.G.B. has not only been trying to take a bite out of Ukraine but is nibbling on Estonia, Georgia and Moldova, all under the guise of protecting “Russian speakers.”

I opposed NATO expansion because I believed that there are few global problems that we can solve without the help of Russia. By expanding NATO at the end of the Cold War, when Russia was weak, we helped to cultivate a politics there that would one day be very receptive to Putin’s message that the West is ganging up on Russia. But, that said, the message is a lie. The West has no intention of bringing Ukraine into NATO. And please raise your hand if you think the European Union plans to invade Russia.

Yet Putin just exploits these fears for two reasons. First, he has a huge chip on his shoulder — no, excuse me; he has a whole lumberyard there — of resentment that Russia is no longer the global power it once was. But rather than make Russia great again by tapping its creative people — empowering them with education, the rule of law and consensual politics to realize their full potential — he has opted for the shortcut of tapping his oil and gas wells and seizing power from his people.

And instead of creating a Russia that is an example to its neighbors, he relies on the brute force that his oil and gas can still buy him. While he rails against NATO, he is really afraid of European Union expansion — that Ukrainians would rather embrace the E.U. market and democracy rules than their historical ties to Russia because they know that through the E.U. they can realize potentials that would never be possible with Russia.

By seizing Crimea and stoking up nationalism, Putin was not protecting Russia from NATO. He was protecting himself from the viruses of E.U. accountability and transparency, which, if they took hold in Ukraine, could spread to Moscow, undermining his kleptocracy.

Normally, I wouldn’t care, but when the world is dividing between zones of order and disorder, and the world of order needs to be collaborating to stem and reverse disorder, the fact that Putin is stoking disorder on Russia’s borders, and not collaborating to promote order in the Middle East, is a real problem. What’s more worrying is that the country he threatens most is Russia. If things go bad there — and its economy is already sagging under Western sanctions — the world of disorder will get a lot bigger.

That is why Putin’s leadership matters, and so does the pope’s. I’m focused on Putin because I think he is making the world a worse place for bad reasons, when he could make a difference in Europe and the Middle East with just an ounce more decency and collaboration. America, too, has plenty to learn from the pope’s humility, but say what you will, we’re still focused on trying to strengthen the global commons, whether by protecting people from jihadists in Iraq or fighting Ebola in Africa. We could do more. Putin needs to do a lot more.

“The best leaders don’t set timid and selfish goals that are easy to meet but instead set bold and inclusive goals that are hard to achieve,” remarked Timothy Shriver, the chairman of the Special Olympics, who has just written a book on leadership, “Fully Alive: Discovering What Matters Most.” “We’re all looking for ways to make sense of a world without a center, but we’ll only find that in people who lead with authentic humility and reckless generosity.”

And now here’s Mr. Bruni:

Onstage before thousands of fans, Sam Smith sang “Stay With Me,” beseeching his partner in a one-night stand for a few minutes more, and I half wondered if the two of them needed the extra time to finish bottles of Miller Lite, because a printed plug for the beer hovered over his head.

Performing “Summertime Sadness,” Lana Del Rey told a lover to “kiss me hard before you go.” Would she be texting him later with a Samsung Galaxy, the smartphone for which the stage on which she appeared was visibly named?

And while I’d never thought about any car in connection with the musicians in the band Interpol, I came to picture them caroming from gig to gig in a Civic or an Accord. “Honda” floated over them as they gave their concert.

For every stage, a different sponsor. Behind every beat, a different brand.

This happened in early October. I was at the Austin City Limits Music Festival, and I was at the limits of my patience. I hadn’t expected all of these corporate come-ons, so pervasive in other precincts, to be assaulting me here of all places.

“Keep Austin Weird” is the Texas capital’s unofficial slogan, a clue to its proudly subversive soul. And a gathering of bare-armed, bare-legged lovers of song and smokers of pot on a gigantic field brings to mind Woodstock, not Austin Ventures, which provides financing to start-ups, and RetailMeNot, which distributes discount coupons. Those firms, too, were sponsors of stages.

Someone shoved a free sample of Cinnamon Toast Crunch cereal at me on my way in. Someone else handed out free beer cozies advertising Imperial, a brew on sale at the event. Plastered all over the place were posters for “Not That Kind of Girl,” the new memoir by a certain “Girls” creator. The festival had been misnamed. This was Lenapalooza.

I kept thinking of another writer, David Foster Wallace. His novel “Infinite Jest,” published in 1996, imagines a tomorrow in which time itself is auctioned off to the highest bidder and the calendar becomes a billboard. There’s the “Year of the Whopper,” the “Year of the Whisper-Quiet Maytag Dishmaster” and even the “Year of the Tucks Medicated Pad” — a 12-month paean to posterior discomfort, 52 weeks in honor of hemorrhoids.

Is that future so far off? While recording devices have liberated many of us from commercials on television, the rest of our lives are awash in ads. They’re now nestled among the trailers at movies. They flicker on the screens in taxis.

They’re woven so thoroughly into sporting events, from Nascar races to basketball games, that it’s hard to imagine an era when they weren’t omnipresent. But in a story earlier this year on the website Consumerist, Chris Moran reported that 20 years ago, only one of the major-league baseball stadiums had a corporate moniker, Busch Stadium in St. Louis.

In contrast, 20 of the 30 stadiums now have sponsors.

It’s the same with football, maybe worse. On the weekend after I got back from Austin, I went to watch the New York Jets play, and within five minutes of my arrival at MetLife Stadium, I was confronted with all sorts of sub-sponsors.

Near the Verizon gate, I spotted a V.I.P. section called the Hertz suites and saw signs that identified JetBlue as the official airline of the team, Toyota as its official vehicle and the Microsoft Surface as the official tablet of the National Football League. I resolved to check out the restrooms for an official toilet paper. (Note to Cottonelle: I did, and there’s an unclaimed opportunity for you, if you can beat Charmin to the punch.)

Inside the stadium, the Verizon scoreboard was not to be confused with the Bud Light scoreboard or the Pepsi scoreboard.

When Americans talk about how crass contemporary life can seem, this advertising onslaught is part of what they’re reacting to. And their growing chilliness toward corporations and sense of capitalism run amok aren’t just about the salaries of chief executives and the tax dodges in play. They’re about the way hucksterism invades everything, scooping up everyone.

Matthew McConaughey is at his career’s summit, with a recent Oscar for “Dallas Buyers Club” and a splendid performance in “Interstellar” (to be released next month), and what’s he doing with this clout? He’s putting it behind the wheel of a Lincoln and peddling luxury cars the way Beyoncé has pushed Pepsi all these years.

Sellers keep finding new, willing vessels for their logos everywhere they turn. Will we someday travel from San Francisco to Northern California across the Gulden’s Mustard Bridge, for a hike in the Wells Fargo Redwood Forest?

It’s a vendor’s world. We’re just pawns in it, even when all we want to do is hum a simple tune.

Brooks, Cohen and Nocera

October 21, 2014

Bobo thinks he’s going to tell us all about “The Quality of Fear.”  He babbles that the reaction nationally to Ebola is rooted in weaknesses in our cultural fabric.  I’m sure that the ginning up of pants-pissing terror by the media has nothing to do with anything…  Mr. Cohen, in “China Versus America,” ‘splains how Chinese “harmony” and American “freedom” produce the dangerous clash of two exceptionalisms.  Mr. Nocera, in “A World Without OPEC?”, thinks he knows how the shale revolution has weakened the power of the oil cartel.  In the comments “sdavidc9″ from Cornwall had this to say:  “To write an article on the future of oil without mentioning global warming is oh so Republican. We are fighting over seating arrangements on the Titanic.”  Here’s Bobo:

There’s been a lot of tut-tutting about the people who are overreacting to the Ebola virus. There was the lady who showed up at the airport in a homemade hazmat suit. There were the hundreds of parents in Mississippi who pulled their kids from school because the principal had traveled to Zambia, a country in southern Africa untouched by the Ebola outbreak in the western region of the continent. There was the school district in Ohio that closed a middle school and an elementary school because an employee might have flown on the same plane (not even the same flight) as an Ebola-infected health care worker.

The critics point out that these people are behaving hysterically, all out of proportion to the scientific risks, which, of course, is true. But the critics misunderstand what’s going on here. Fear isn’t only a function of risk; it’s a function of isolation. We live in a society almost perfectly suited for contagions of hysteria and overreaction.

In the first place, we’re living in a segmented society. Over the past few decades we’ve seen a pervasive increase in the gaps between different social classes. People are much less likely to marry across social class, or to join a club and befriend people across social class.

That means there are many more people who feel completely alienated from the leadership class of this country, whether it’s the political, cultural or scientific leadership. They don’t know people in authority. They perceive a vast status gap between themselves and people in authority. They may harbor feelings of intellectual inferiority toward people in authority. It becomes easy to wave away the whole lot of them, and that distrust isolates them further. “What loneliness is more lonely than distrust,” George Eliot writes in “Middlemarch.”

So you get the rise of the anti-vaccine parents, who simply distrust the cloud of experts telling them that vaccines are safe for their children. You get the rise of the anti-science folks, who distrust the realm of far-off studies and prefer anecdotes from friends to data about populations. You get more and more people who simply do not believe what the establishment is telling them about the Ebola virus, especially since the establishment doesn’t seem particularly competent anyway.

Second, you’ve got a large group of people who are bone-deep suspicious of globalization, what it does to their jobs and their communities. Along comes Ebola, which is the perfect biological embodiment of what many fear about globalization. It is a dark insidious force from a mysterious place far away that seems to be able to spread uncontrollably and get into the intimate spheres of life back home.

Third, you’ve got the culture of instant news. It’s a weird phenomenon of the media age that, except in extreme circumstances, it is a lot scarier to follow an event on TV than it is to actually be there covering it. When you’re watching on TV, you only see the death and mayhem. But when you’re actually there, you see the broader context of everyday life going on alongside. Studies of the Boston Marathon bombing found that people who consumed a lot of news media during the first week suffered more stress than people who were actually there.

Fourth, you’ve got our culture’s tendency to distance itself from death. Philip Roth once wrote: “In every calm and reasonable person there is a hidden second person scared witless about death.” In cultures where death is more present, or at least dealt with more commonly, people are more familiar with that second person, and people can think a bit more clearly about risks of death in any given moment.

In cultures where people deal with death by simply getting it out of their minds, the prospect of sudden savage death, even if extremely unlikely, can arouse a mental fog of fear, and an unmoored and utopian desire to want to reduce the risk of early death to zero, all other considerations be damned.

Given all these conditions, you wind up with an emotional spiral that develops its own momentum.

The Ebola crisis has aroused its own flavor of fear. It’s not the heart-pounding fear you might feel if you were running away from a bear or some distinct threat. It’s a sour, existential fear. It’s a fear you feel when the whole environment seems hostile, when the things that are supposed to keep you safe, like national borders and national authorities, seem porous and ineffective, when some menace is hard to understand.

In these circumstances, skepticism about authority turns into corrosive cynicism. People seek to build walls, to pull in the circle of trust. They become afraid. Fear, of course, breeds fear. Fear is a fog that alters perception and clouds thought. Fear is, in the novelist Yann Martel’s words, “a wordless darkness.”

Ebola is a treacherous adversary. It’s found a weakness in our bodies. Worse, it exploits the weakness in the fabric of our culture.

Go change your underwear, Bobo…  Here’s Mr. Cohen, writing from Singapore:

Let us take it as a given that the post-1945 world order with the United States as dominant nation has begun to unravel, that China is rising to inherit the earth, that the unease of our times has much to do with that difficult transition, and that violent conflict is a normal accompaniment to the passing of the baton from one great power to the next. America stood tall at the end of World War II. It also stood on a vast field of corpses.

Let us further posit the far-fetched hypothesis that humankind has learned from history. It must then be determined to avoid another conflagration. Happy talk of hyper-connectivity is not enough. The dream of the victory of enlightened self-interest in the name of the collective good on a shrinking planet was an ephemeral late 20th-century illusion. What will matter above all is the capacity of the United States and China to avoid fatal misunderstanding. In a state of mutual incomprehension, clashing interests will escalate.

How far China and America are from understanding each other became clear to me the other day as I listened to George Yeo, the former Singaporean foreign minister. He set out his view of the United States as a “missionary” power filled with the righteous conviction that it must usher the earth to liberty and democracy, and of China as an anti-missionary power convinced by its own bitter experience of foreign domination that nonintervention in the affairs of other states is a necessary form of respect. Far from cynical exploitation, Yeo argued, China’s non-judgmental approach to other powers was above all a reflection of its own history, a form of moral rectitude. The West’s perception of Chinese bullying and ruthless mercantilism was just plain wrong.

Yeo is a highly intelligent and thoughtful man with a deep knowledge of China and considerable experience of life in America. I can’t help seeing cynicism in China’s readiness to extract resources from the realms of dictators or democrats and its unreadiness to do as much as America in stopping Ebola or the killers who call themselves Islamic State. I am sure that, for President Xi Jinping of China, the sight of America getting enmeshed in another Middle Eastern skirmish has its satisfactions. But Yeo made me wonder. Can the missionary mindset begin to comprehend the non-missionary worldview, or even accept such categorization?

The core problem is two forms of exceptionalism, the American and the Chinese. The United States is an idea as well as a nation. Americans, even in a battle-scarred inward-looking moment such as the present, are hard-wired to the notion of their country as a beacon to humanity. President Obama’s foreign policy is unpopular in part because he has interpreted a popular desire to regroup as license to be satisfied with hitting singles and avoiding strike-outs. That is the attitude of an unexceptional nation, which can never be America’s self-image.

But Chinese exceptionalism is no less powerful. It holds up China as a uniquely non-expansionist power over millennia of history, bringing harmony in a Confucian expression of its benevolence — a China standing in contrast to the predatory West. The Communist Party, with its mantra of “peaceful rise,” has fashioned an effective pillar of its ideology through the integration of Middle Kingdom thought. As Joe Studwell, the author of “How Asia Works,” put it to me in an e-mail, the party with “not much socialism to cling to, has reached into Middle Kingdom exceptionalism by resurrecting Confucius, starting Confucius Institutes all over the world.” The result, as Yuan-kang Wang, an associate professor at Western Michigan University, has written in Foreign Policy, is a widespread belief in “historical China as a shining civilization in the center of All-under-Heaven, radiating a splendid and peace-loving culture.”

Exceptionalism, in all its forms, is tenacious. Tell Tibetans about China’s peace-loving culture. Tell Iraqis about America’s dedication to liberty. The contradictions, and failings, within the beliefs do not diminish them. I believe, still, in the overall beneficence of American power, the fundamental yearning of the human spirit for freedom, and the unique American identification with that desire. Xi’s clampdown on the Internet, his attempt to clean up corruption when corruption must be endemic to any one-party state, his expansionism in the South China Sea, and his difficulties with a stubborn pro-democracy movement in Hong Kong all strike me as demonstrating the internal contradictions of “harmony” and “peace” within a Chinese system that has generated prosperity but increasingly stifles the open debate more prosperous people want.

Europeans, with their experience of 20th-century devastation, would argue that all forms of exceptionalism are dangerous, the missionary and non-missionary equally so. They have settled for less in the interests of quiet. America and China will not do that in the foreseeable future, and so their relationship must be viewed with guarded pessimism. In war’s aftermath there are no exceptions to human suffering.

And now we get to Gunga Din:

Forty-one years ago this month, the Arab oil embargo began. The countries that were part of it belonged, of course, to the Organization of Petroleum Exporting Countries — OPEC — which had banded together 13 years earlier to strengthen their ability to negotiate with international oil companies. The embargo led to widespread shortages in the United States, higher prices at the gas pump and long lines at gas stations. By the time it ended, the price of oil had risen to $12 a barrel from $3.

Perhaps more important than the price increases themselves was the new world order the embargo signaled. The embargo “set in motion geopolitical circumstances that eventually allowed [OPEC] to wrest control over global oil production and pricing from the giant international oil companies — ushering in an era of significantly higher oil prices,” as Amy Myers Jaffe and Ed Morse noted in an article in Foreign Policy magazine that was published last year at the 40th anniversary. Twice a year, OPEC’s oil ministers would meet in Vienna, where they would set oil policy — deciding to either hold back or increase oil production. There was always cheating among members, but there was usually enough discipline in the ranks to keep prices more or less where OPEC wanted them.

As it happens, the title of that Foreign Policy article was “The End of OPEC.” Jaffe and Morse are both global energy experts — she is the executive director of Energy and Sustainability at the University of California, Davis, and he is the global head of commodities research at Citigroup — who say that if America plays its cards right, OPEC’s dominance over the oil market could be over. I think that day may have already arrived.

“OPEC is not going to survive another 50 years,” Morse told me. “It probably won’t even survive another 10. It has become extremely difficult for them to forge an agreement.”

When Morse and Jaffe wrote their article last year, the price of oil was more than $100 a barrel. Today, the per-barrel price is in the low- to mid-$80s. It has dropped more than 25 percent since June. There was a time when $80 a barrel would have been more than satisfactory for OPEC members, but those days are long gone. Venezuela’s budgetary needs requires that it sell its oil at well above $100 a barrel. The Arab Spring prompted a number of important OPEC members — including Saudi Arabia and the United Arab Emirates — to increase budgetary spending to keep their own populations quiescent. According to the International Monetary Fund, the United Arab Emirates needs a price of more than $80 to meet its budgetary obligations. That’s up from less than $25 a barrel in 2008.

Not long ago, Venezuela asked for an emergency OPEC meeting to discuss decreasing production. Iran has said that such a meeting is unnecessary. Meanwhile, Saudi Arabia has made it clear that it is primarily concerned with not losing market share, so it will continue to pump out oil regardless of the needs of other OPEC members. This is not exactly cartel-like behavior. The next OPEC meeting is scheduled for late November, but there is little likelihood of an agreement.

And why does OPEC suddenly find itself in such disarray? Simply put, the supply of oil is greater than the demand, and OPEC has lost its ability to control the supply. Part of the reason is a slowdown in global demand. China’s economy has slowed, and so has its voracious appetite for oil. Japan, meanwhile, is increasingly turning to natural gas and nuclear power.

But an even bigger part of the reason is that the shale revolution in North America is utterly changing the supply-demand dynamic. Since 2008, says Bernard Weinstein, an energy expert at Southern Methodist University, oil production in the United States is up 60 percent. That’s an additional three million barrels a day. Within a few years, predicts Morse, America will overtake Russia and Saudi Arabia and become the world’s largest oil producer.

What’s more, according to another article Morse wrote, this one for Foreign Affairs magazine, “the costs of finding and producing oil and gas in shale and tight rock formations are steadily going down and will drop even more in the years to come.” In other words, the American energy industry might well be able to withstand further price drops easier than OPEC members.

When I got Jaffe on the phone, I asked her if she thought OPEC was a spent force. “You can never say never,” she replied, and then laid out a few dire scenarios — mostly revolving around oil fields being bombed or attacked — that might make supply scarce again. But barring that, this is a moment we’ve long been waiting for. Thanks to the shale revolution, OPEC has become a paper tiger.

Krugman’s blog, 10/19/14

October 20, 2014

There was one post yesterday, “This Age of Derp:”

I gather that some readers were puzzled by my use of the term “derp” with regard to peddlers of inflation paranoia, even though I’ve used it quite a lot. So maybe it’s time to revisit the concept; among other things, once you understand the problem of derpitude, you understand why I write the way I do (and why the Asnesses of this world whine so much.)

Josh Barro brought derp into economic discussion, and many of us immediately realized that this was a term we’d been needing all along. As Noah Smith explained, what it means — at least in this context — is a determined belief in some economic doctrine that is completely unmovable by evidence. And there’s a lot of that going around.

The inflation controversy is a prime example. If you came into the global financial crisis believing that a large expansion of the Federal Reserve’s balance sheet must lead to terrible inflation, what you have in fact encountered is this:

I’ve indicated the date of the debasement letter for reference.

So how do you respond? We all get things wrong, and if we’re not engaged in derp, we learn from the experience. But if you’re doing derp, you insist that you were right, and continue to fulminate against money-printing exactly as you did before.

The same thing happens when we try to discuss the effects of tax cuts — belief in their magical efficacy is utterly insensitive to evidence and experience.

Now, not every wrong idea — or claim that I disagree with — is derp. I was pretty unhappy with the claim that doom looms whenever debt crosses 90 percent of GDP, and not too happy with the later claims that the relevant economists never said such a thing; that’s what everyone from Paul Ryan to Olli Rehn heard, and they were not warned off. But there has not, thankfully, been a movement insisting that growth does too fall off a cliff at 90 percent, so this is not a derp thing.

But there is, as I said, a lot of derp out there. And what that means, in turn, is that you shouldn’t pretend that we’re having a real discussion when we aren’t. In fact, it’s intellectually dishonest and a public disservice to pretend that such a discussion is taking place. We can and indeed are having a serious discussion about the effects of quantitative easing, but people like Paul Ryan and Cliff Asness are not part of that discussion, because no evidence could ever change their view. It’s not economics, it’s just derp.

Now, saying this brings howls of rage, accusations of rudeness and being nasty. But what else can one do?

Krugman, solo

October 20, 2014

Mr. Blow is off today, so Prof. Krugman has the place to himself.  In “Amazon’s Monopsony Is Not O.K.” he says it comes down to this: Amazon has too much power, and it is abusing it.  Here he is:

Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America.

O.K., I know that was kind of abrupt. But I wanted to get the central point out there right away, because discussions of Amazon tend, all too often, to get lost in side issues.

For example, critics of the company sometimes portray it as a monster about to take over the whole economy. Such claims are over the top — Amazon doesn’t dominate overall online sales, let alone retailing as a whole, and probably never will. But so what? Amazon is still playing a troubling role.

Meanwhile, Amazon’s defenders often digress into paeans to online bookselling, which has indeed been a good thing for many Americans, or testimonials to Amazon customer service — and in case you’re wondering, yes, I have Amazon Prime and use it a lot. But again, so what? The desirability of new technology, or even Amazon’s effective use of that technology, is not the issue. After all, John D. Rockefeller and his associates were pretty good at the oil business, too — but Standard Oil nonetheless had too much power, and public action to curb that power was essential.

And the same is true of Amazon today.

If you haven’t been following the recent Amazon news: Back in May a dispute between Amazon and Hachette, a major publishing house, broke out into open commercial warfare. Amazon had been demanding a larger cut of the price of Hachette books it sells; when Hachette balked, Amazon began disrupting the publisher’s sales. Hachette books weren’t banned outright from Amazon’s site, but Amazon began delaying their delivery, raising their prices, and/or steering customers to other publishers.

You might be tempted to say that this is just business — no different from Standard Oil, back in the days before it was broken up, refusing to ship oil via railroads that refused to grant it special discounts. But that is, of course, the point: The robber baron era ended when we as a nation decided that some business tactics were out of line. And the question is whether we want to go back on that decision.

Does Amazon really have robber-baron-type market power? When it comes to books, definitely. Amazon overwhelmingly dominates online book sales, with a market share comparable to Standard Oil’s share of the refined oil market when it was broken up in 1911. Even if you look at total book sales, Amazon is by far the largest player.

So far Amazon has not tried to exploit consumers. In fact, it has systematically kept prices low, to reinforce its dominance. What it has done, instead, is use its market power to put a squeeze on publishers, in effect driving down the prices it pays for books — hence the fight with Hachette. In economics jargon, Amazon is not, at least so far, acting like a monopolist, a dominant seller with the power to raise prices. Instead, it is acting as a monopsonist, a dominant buyer with the power to push prices down.

And on that front its power is really immense — in fact, even greater than the market share numbers indicate. Book sales depend crucially on buzz and word of mouth (which is why authors are often sent on grueling book tours); you buy a book because you’ve heard about it, because other people are reading it, because it’s a topic of conversation, because it’s made the best-seller list. And what Amazon possesses is the power to kill the buzz. It’s definitely possible, with some extra effort, to buy a book you’ve heard about even if Amazon doesn’t carry it — but if Amazon doesn’t carry that book, you’re much less likely to hear about it in the first place.

So can we trust Amazon not to abuse that power? The Hachette dispute has settled that question: no, we can’t.

It’s not just about the money, although that’s important: By putting the squeeze on publishers, Amazon is ultimately hurting authors and readers. But there’s also the question of undue influence.

Specifically, the penalty Amazon is imposing on Hachette books is bad in itself, but there’s also a curious selectivity in the way that penalty has been applied. Last month the Times’s Bits blog documented the case of two Hachette books receiving very different treatment. One is Daniel Schulman’s “Sons of Wichita,” a profile of the Koch brothers; the other is “The Way Forward,” by Paul Ryan, who was Mitt Romney’s running mate and is chairman of the House Budget Committee. Both are listed as eligible for Amazon Prime, and for Mr. Ryan’s book Amazon offers the usual free two-day delivery. What about “Sons of Wichita”? As of Sunday, it “usually ships in 2 to 3 weeks.” Uh-huh.

Which brings us back to the key question. Don’t tell me that Amazon is giving consumers what they want, or that it has earned its position. What matters is whether it has too much power, and is abusing that power. Well, it does, and it is.

Krugman’s blog, 10/18/14

October 19, 2014

There were three posts yesterday.  The first was “The Civility Whine:”

At this point in the great inflation-deflation debate, a lot of what the inflationistas have to say takes the form of whining about the rudeness of their critics — of course, me in particular. I would say that this is a de facto confession that they’ve run out of substantive defenses for their position — although I guess I would say that, wouldn’t I?

But there’s something else you should know: the inflation derpers aren’t just ignorant about monetary policy, they also don’t understand the rules of argument. In particular, the constant complaint about “ad hominem” attacks shows that they don’t know what that means.

I think the Wikipedia definition is pretty good: an ad hominem is

a form of criticism directed at something about the person one is criticizing, rather than something (potentially, at least) independent of that person.

So if, for example, somebody discussing my views on monetary policy refers to me as “Enron consultant Paul Krugman”, that’s ad hominem. But if I say that inflationistas have been

bobbing and weaving, refusing to acknowledge having said what they said, being completely unwilling to admit mistakes.

that’s really not ad hominem; I’m attacking how these people argue, not their personal attributes.

What about the lexicon we’ve developed over the course of the past few years — zombies, cockroaches, confidence fairies, derp? These are all terms directed at arguments, not people; no, I didn’t call Olli Rehn a cockroach, just his historically ignorant assertion that Keynes wouldn’t have called for fiscal stimulus in the face of high debt.

The point is that at no point, as far as I know, have I relied on personal attacks as a substitute for substantive argument. I never accuse someone of practicing derp without showing that he is, indeed, practicing derp.

Still, why use such colorful language? To get peoples’ attention, of course, and to highlight the sheer scale of the folly. And it’s working, isn’t it?

Now, the people who make zombie arguments and engage in derp feel deeply insulted by all of this. But if you’re going to engage in public debate, with very real policy concerns that affect the lives of millions at stake, you are not entitled to have your arguments treated with respect unless they deserve respect.

One more thing: I also don’t think that the derp brigade understands what it means to argue from authority. When I say that you shouldn’t opine on monetary policy unless you’re willing to invest some time on understanding the monetary debate, I am saying exactly that. I’m not saying that you need a Ph.D. or a chair at a fancy university; I’m saying that you need to do your homework.

In a better world, none of this would be relevant. Policy disputes would be based on defensible, well-informed positions, on which reasonable people could disagree, and people who were proved wrong would acknowledge that fact and revise their views. Also, everyone would get a pony.

Phooey on the pony.  I want a unicorn.  His second post yesterday was “Why to Worry About Deflation:”

David Wessel has a very nice explainer in the WSJ — although I wonder how the editor allowed his citation of a particular expert under point #2 to slip through. One thing he doesn’t do, however, is make it clear that zero is not a magic red line here — as even the IMF has made a point of emphasizing, too-low inflation has all the adverse effects of outright deflation, just to a lesser degree.

Most notably, the euro area currently has 0.8 percent core inflation, far below its 2 percent target, which is itself too low. This means that Europe is already in a lowflationary trap, qualitatively the same as a deflationary trap.

Yesterday’s last post was “Friday Night Music, Saturday Night Followup:”

Last week I highlighted the Sarah Jarosz/Milk Carton Kids matchup; just saw them live, and it was better than I could have imagined — the chemistry among the musicians was amazing, and they’re lovely people too. So catch them if you can …

 

The Pasty Little Putz, Dowd and Bruni

October 19, 2014

It’s a quiet day today since The Moustache of Wisdom and Mr. Kristof are off.  In “The Ebola Scare” The Putz gurgles that sometimes incompetence can be a lot more frightening than any conspiracy theory.  MoDo has been watching TV again.  In “An Affair to Remember, Differently” she squeals that infidelity is as fascinating as ever, just ask the co-creator of Showtime’s “The Affair.”  Mr. Bruni, in “The Virus of Cynicism,” says Ebola is Obama’s presidency — and the efficacy of government — in a petri dish.  Here’s The Putz:

I promised myself I wouldn’t do it, but I did: While flying from D.C. to Dallas last week, just after the news came out that an Ebola-infected nurse had been allowed to fly while running a fever, I went back and read the opening pages of Stephen King’s “The Stand.”

In King’s epic, perhaps his finest, a superflu with a 99.4 percent fatality rate accidentally escapes from a desert laboratory and lays waste to civilization. King being King, supernatural developments ensue for the survivors. But the book is at its most terrifying in the unraveling with which it opens, when the only bogeyman that matters is a hacking cough that spreads and spreads and spreads.

To reread these pages now — in a time of national, well, not panic but least disquiet over the handling of Ebola inside our borders — is to be struck both by parallels and by crucial differences between the scenario King conjured and what we fear today.

The parallels lie, not surprisingly, in the realm of official incompetence. King’s superflu escapes because various computerized safeguards fail; it spreads because of interagency chaos in chasing down patient zero; it compromises a C.D.C. facility whose safeguards turn out to be insufficient. The chaos swirling around the Dallas Ebola infections has followed this kind of pattern: the patient sent home undiagnosed; the unprepared hospital and the infected nurses; the C.D.C.’s weird slowness in taking over; the confident governmental assurances giving way to blame-shifting, double talk and the appointment of a political hack as Ebola princeps … er … sultan … er, czar.

But the differences are interesting as well. King’s novel, infused with 1970s-era paranoia, imagines a government that blunders constantly but is also malignantly competent — brilliant enough to design a superflu capable of killing 99 percent of humanity, tyrannical enough to suppress media reports with martial law and murder, ruthless enough to swiftly spread the superflu behind the Iron Curtain to make sure our enemies go down with us.

This part of the novel’s vision is of a piece with all of modern conspiracy culture, which requires a certain level of omnicompetence to sustain its theories about covered-up alien landings or 9/11 inside jobs.

But conspiracy culture, while always resilient, has had a tough go of it of late. From the Iraq war to Hurricane Katrina and various Obama-era debacles, the public has been steadily conditioned to fear government incompetence much more than it fears secret conspiracies against the public good. Instead of the Bilderbergers and the Trilateralists and the cigarette-smoking man, it’s Mike “heckuva job” Brown and George “slam dunk” Tenet and whoever was allegedly in charge of the V.A. hospital system who haunt our collective unconscious these days. People still indulge the occasional “House of Cards”-style fantasy of all-powerful political puppetmasters, but what actually scares us is the idea of the Ebola epidemic being managed by the gang from “Veep.”

I suspect that’s part of why Obama-era scandals that may actually involve secret government machinations — from the N.S.A. revelations to the harassment of journalists and the politicized overreach of Lois Lerner’s I.R.S. division — haven’t fixed themselves in the public imagination, at least among people who don’t have an explicit ideological or political interest at stake. Wisely or not, Americans have trouble imagining the White House that gave us the HealthCare.gov rollout micromanaging partisan I.R.S. chicanery, or the national security bureaucracy that couldn’t see 9/11 or the Islamic State coming doing anything all that Machiavellian with a firehose’s worth of online data.

Likewise with Ebola: Of course you can find wild conspiracy theories, but the idea of a successful government cover-up — secret body bags, muzzled journalists — is basically laughable. Instead, the baseline anxiety is all about bureaucratic incompetence exacerbated by insouciance, with conservatives fearing that a liberal administration won’t be willing to go far enough — in terms of travel restrictions and quarantines — to effectively contain the disease’s spread.

Because plausible arguments have been offered for and against a travel ban, the administration’s actual response will be an interesting case study. As much as the authorities have fouled up so far, we’ve only had a few infections. If the White House continues to resist calls for more dramatic measures, and we manage to contain Ebola domestically, then the president and his appointees will look more competent and levelheaded than their critics — a result that’s all too rare these days.

Given the track record, however, it’s easy to imagine somewhat less fortunate results, and travel restrictions increasingly seem like an appropriate hedge against ongoing domestic incompetence.

But it would be welcome, and then some, to watch a competent strategy unfold that rendered that opinion obsolete.

And then, our faith in government’s effectiveness partially restored, we can all get back to worrying about what’s being secretly cooked up in the Nevada desert.

Faith in government effectiveness will only be possible after all of the current crop of Republicans have been voted out of office.  Next up we have MoDo’s fizzing:

We live in a world awash in unreliable narrators.

Officials at the Texas Health Presbyterian Hospital were unreliable narrators on Ebola. The Internet is bristling with unreliable narrators who prefer their takes to the truth. The unsavory husband and wife in the thriller “Gone Girl” are such chillingly unreliable narrators that they easily beat out the undead unreliable narrator, Dracula, at the box office. And let’s not even start on Fox News.

So now comes the riveting “Rashomon” in Montauk, Showtime’s “The Affair,” with Ruth Wilson and Dominic West offering alternating he recalls-she recalls versions of the same story in each show, as they get swept up in sexual infidelity and a serious crime during a shimmering summer.

I went to Brooklyn to talk to West — the British actor who played the raffish Baltimore detective Jimmy McNulty in “The Wire” on HBO — and the show’s co-creator, Sarah Treem, as they shot scenes at a school there.

West’s character, Noah, is a novelist and teacher who lives in a Brooklyn brownstone with his wife, played by Maura Tierney, and four kids. He’s happily married but feeling insecure about the lackluster performance of his first novel. It gets worse when his wife giggles at his facial expression during lovemaking, and he’s taunted by his arrogant father-in-law, a famous fiction writer who owns the oceanfront mansion in the Hamptons where the family is spending the summer.

When West meets Wilson’s comely Alison, a diner waitress and Montauk native who is also married to someone she loves (Joshua Jackson) and also feeling uncertain and anxious, the chase is on.

But who’s chasing whom? In West’s memory, Alison is sultry and curvy, wearing sexy outfits and seducing him. In Alison’s version, she’s wan and withdrawn, still mourning the drowning death of her small son and dubious about Noah’s aggressive blandishments.

Treem, a playwright and “House of Cards” writer, created “The Affair” with Hagai Levi, with whom she also worked on HBO’s “In Treatment.”

Treem said the new show uses sex to illustrate that the characters are “trying to connect and they fail at it all the time. I think we have a lot of sex in this show, but in terms of the sex where they’re actually unified, that happens very rarely.”

Treem is a newlywed. In June, she married Jay Carson, a former campaign spokesman for Howard Dean and Hillary Clinton who is a producer on “House of Cards” and the father of Treem’s nearly 2-year-old son. Yet the brainy, alluring 34-year-old has an intriguingly jaded philosophy of romance.

“I have this belief that, in all relationships, there’s this long erotic moment that happens at the beginning of the relationship,” she said. “It’s like the pole of a tetherball court, and then everything else is just basically that damn ball going around, winding and unwinding around that one erotic moment, and you’re trying to always get back to that incredible moment of connection with somebody, and it’s gone forever.”

She said they put up a quote by the poet Robert Hass in the writers’ room, the final line of a passage where he describes the sensation of making love to a woman: “I felt a violent wonder at her presence like a thirst for salt, for my childhood river with its island willows, silly music from the pleasure boat, muddy places where we caught the little orange-silver fish called pumpkinseed. It hardly had to do with her. Longing, we say, because desire is full of endless distances.”

I tell her that Carson asked me if he should be worried, given how knowingly his wife writes about infidelity.

She laughed, replying, “I wrote the show when I was still single at 31, so at that point in your life you see a lot of infidelity. You have married men coming on to you. You see your friends already in affairs. From my perspective at that point, infidelity was all over the place. Now, being married, I would like my marriage to work. I love him, and I want to be faithful to him, and I want him to be faithful to me.” But, she adds matter-of-factly, “you probably have a 20 percent chance, maybe a 10 percent chance, of actually getting through an entire marriage with no infidelity.”

When I ask her if she thinks that men are more prone to cheat, she instantly replies: “Yes, I do.”

West agrees that the show may be “a shag-a-thon,” as he merrily put it, but its real subject is meant to be marriage.

“When you have four kids, inevitably your sex life suffers,” said West, himself a father of four. “But, for me, in my 20s and 30s, the stakes are much higher if you’re unfaithful. I feel, as you get older, the stakes get a lot lower. I don’t think infidelity would bother either me or my wife so much as if anything happened to our children, for instance. It ceases to be the primary anxiety.”

When I mentioned that it was interesting how, in Noah’s remembrance, Alison has fuller breasts, West’s eyes widened in surprise.

“Does she?” he said, laughing. “Is that right? Well spotted.”

The actor said that, after playing Iago and the English serial killer Fred West, he yearned for a more heroic role.

“I was really keen to play a good guy,” he said, with a wry smile. “So this is the good guy I’m playing — a cheating husband.”

And now here’s Mr. Bruni:

We have no clue at this point how far Ebola could spread in the United States — and no reason for panic.

But one dimension of the disease’s toll is clear. It’s ravaging Americans’ already tenuous faith in the competence of our government and its bureaucracies.

Before President Obama’s election, we had Iraq, Katrina and the meltdown of banks supposedly under Washington’s watch. Since he came along to tidy things up, we’ve had the staggeringly messy rollout of Obamacare, the damnable negligence of the Department of Veterans Affairs and the baffling somnambulism of the Secret Service.

Now this. Although months of a raging Ebola epidemic in West Africa gave the Centers for Disease Control and Prevention sufficient warning and ample time to get ready for any cases here, it was caught flat-footed, as its director, Tom Frieden, is being forced bit by bit to acknowledge. Weeks ago he assured us: “We are stopping Ebola in its tracks in this country.” Over recent days he updated that assessment, saying that “in retrospect, with 20/20 hindsight,” federal officials could and should have done more at the Texas Health Presbyterian Hospital in Dallas.

President Obama made his own assurances and then corrections. He said back in mid-September that “in the unlikely event that someone with Ebola does reach our shores, we’ve taken new measures so that we’re prepared here at home.”

Well, we weren’t wholly prepared, and the event was never unlikely: This country is a potent magnet for travelers, with a proudly (and rightly) open posture toward the world. People stream in all the time. And a federally funded study published in early September calculated a nearly 20 percent “probability of Ebola virus disease case importation” within three weeks. Within four, Thomas Duncan, the Liberian man who was initially (and inexplicably) turned away from the Dallas hospital, was at last admitted and treated for Ebola.

After that screw-up by hospital officials, Frieden told us that the right protocols were in place. But it now appears that Duncan wasn’t immediately put in isolation; that nurses attending to him were confused about the proper use of protective garb; and that the clothing they wore may have left bits of skin exposed.

We’ve learned of the C.D.C.’s bizarrely permissive attitude toward the hospital workers who came in contact with Duncan or his lab samples. While they should have been on restricted movement, one took flightsafter first calling the C.D.C. for a green light — from Texas to Ohio and back. Another boarded a cruise ship. By Monday, will we find out about a C.D.C.-approved game of Twister in the hospital staff room?

This is bad, not because it means that a large number of Americans are at risk of infection but because it confirms the sloppiness of the very institutions in which we place the most trust. It’s spreading the virus of cynicism.

And the C.D.C.’s missteps have much different implications from the errors made by the Secret Service and by Veterans Affairs. Individual Americans don’t fear that the Secret Service’s lapses will endanger them personally, and many of them aren’t directly affected by the wrongdoing of hospitals for veterans. But they can imagine themselves on one of those flights or in some other closed space with an infected person. They feel vulnerable.

Because the Ebola response deepens doubt about the current government, it almost certainly hurts incumbents in the midterm elections and favors change. That’s unhappy news for Democrats as they fight to retain control of the Senate, and by the end of last week, they were spooked. I heard that not only in my conversations with party strategists but also in the statements of Democratic candidates themselves.

Bruce Brayley, locked in a tight Senate race in Iowa, publicly upbraided the Obama administration for what he characterized as a sluggish response. Al Franken, running for re-election in Minnesota, said there should at least be serious consideration of the sorts of flight restrictions that Obama has dismissed. Even Jay Carney, the president’s former spokesman, mentioned such restrictions as potentially wise policy.

Rationally or not, this is one of those rare moments when Americans who typically tune out so much of what leaders say are paying rapt attention, and Obama’s style of communication hasn’t risen fully to the occasion. Even as he canceled campaign appearances and created a position — Ebola czar — that we were previously told wasn’t necessary, he spoke with that odd dispassion of his, that maddening distance.

About the ban, he said, “I don’t have a philosophical objection necessarily.” About the czar, he said that it might be good to have a person “to make sure that we’re crossing all the T’s and dotting all the I’s going forward.” He’s talking theory and calligraphy while Americans are focused on blood, sweat and tears.

Ebola is his presidency in a petri dish. It’s an example already of his tendency to talk too loosely at the outset of things, so that his words come back to haunt him. There was the doctor you could keep under his health plan until, well, you couldn’t. There was the red line for Syria that he didn’t have to draw and later erased.

With Ebola, he said almost two weeks ago that “we’re doing everything that we can” with an “all-hands-on-deck approach.” But on Wednesday and Thursday he announced that there were additional hands to be put on deck and that we could and would do more. The shift fit his pattern: not getting worked up in the early stages, rallying in the later ones.

It’s more understandable in this case than in others, because when it comes to statements about public health, the line between adequately expressed concern and a license for hysteria is thin and not easily determined. Still, he has to make Americans feel that he understands their alarm, no matter how irrational he deems it, and that they’re being leveled with, not talked down to, not handled. And he has a ways to go.

“If you were his parent, you’d want to shake him,” said one Democratic strategist, who questioned where Obama’s passion was and whether, even this deep into his presidency, he appreciated one of the office’s most vital functions: deploying language, bearing, symbols and ceremony to endow Americans with confidence in who’s leading them and in how they’re being led.

Right now in this country there’s a crisis of confidence, and of competence, and that’s the fertile ground in which the Ebola terror flowers. That’s the backdrop for whatever steps Obama and Frieden take from here. With the right ones, they can go a long way toward calming people who are anxious not just about Ebola but about America. I don’t even want to think about the wrong ones.

Krugman’s blog, 10/17/14

October 18, 2014

There were three posts yesterday.  The first was “La Vie En (Charlie) Rose:”

My head talks about my Rolling Stone defense of Obama.

The second post yesterday was “Inflation Derp Abides:”

Via Business Insider, Zero Hedge directed its readers to an “excellent interview” in which Jim Rogers declared that “we are all going to pay a terrible price for all this money-printing and debt.” And I asked the obvious question: How long has Rogers been predicting a printing-press-and-deficits disaster?

The answer is, a very, very long time. Here he is in October 2008 — six full years ago — declaring that we were setting the stage for a “massive inflation holocaust.”

Now, you might have thought that after years of being completely wrong (with a diversion into inflation trutherism), one of two things would happen: 1. Rogers would question his own premises 2. People would stop taking his views on macroeconomics seriously.

But no. His views haven’t changed (and given what we’ve seen from others of similar views, he would deny that anything was amiss with his predictions); and he’s still treated by financial media as a source of deep wisdom.

The ability of inflation derp to persist, even flourish, in an age of disinflation remains remarkable.

Yesterday’s last post was “Friday Night Music: Lucius Covers the Kinks:”

Can there be too much Lucius? Not to my taste. And the band does want people to know that they have released a special enhanced version of their album, with a bunch of bonus tracks including live performances (which is where they really shine). And here’s something unusual: a live performance video assembled from videos taken from many people who were there. If this doesn’t make you smile, I feel sorry for you:

 

Nocera, solo

October 18, 2014

Ms. Collins is off today, so Mr. Nocera has the place to himself.  In “Failures of Competence” he says the C.D.C. was supposed to be the federal agency that we could trust without fail.  Here he is:

Et tu, C.D.C.?

For years, the Centers for Disease Control and Prevention has been the most trusted agency in the federal government. In 2003, when Gallup did a survey to determine what the public thought of various federal agencies, the C.D.C. topped the list, with 66 percent of respondents describing it as “excellent” or “good.”

Last year, a similar Gallup poll showed that the C.D.C.’s approval rating had dropped to 60 percent, which was still better than any other agency. The C.D.C. has seen the country through SARS and the swine flu virus. The general perception was not only that it did important, apolitical work, but that it was highly competent. “I used to call the C.D.C. the shining star of federal agencies,” says Lawrence O. Gostin, a global health expert at Georgetown Law.

And then came Ebola.

The Ebola outbreak is not exactly enhancing the C.D.C.’s reputation for competence. At first, the agency reassured the public that American hospitals were ready to handle any Ebola cases that came their way. That has turned out not to be the case. When Thomas Eric Duncan was diagnosed with Ebola in Dallas, the C.D.C. did not immediately fly in an expert team — something that the C.D.C. director, Tom Frieden, now says it should have done. Most recently, the C.D.C. appears to have allowed one of the Dallas nurses who helped Duncan to take a flight from Ohio to Texas even though she had a slightly raised temperature. When it became clear that she had contracted the virus — the second nurse to do so — Frieden was forced to admit that letting her on the plane was a mistake.

Meanwhile, Frieden, a highly respected public health expert, had to walk back some of his remarks. Congress — including Democrats — appears dismayed by the mistakes. Perhaps the biggest one the C.D.C. made was that its voluntary guidelines for treating Ebola patients were too lax. In The Times a few days ago, Donald G. McNeil quoted several experts saying the protocols established by the C.D.C. were, in the words of one, “absolutely irresponsible and dead wrong.” One important protocol is having a “site supervisor” watching for errors. The C.D.C. has now included that guideline.

Are there extenuating circumstances? To hear infectious disease specialists tell it, the answer is yes. Like all federal agencies, the C.D.C. saw significant cuts to its funding thanks to sequestration. Another expert, Marc Lipsitch of the Harvard School of Public Health, told me in an email that because the chances of Ebola being imported to the U.S. were considered low, preparing for it was not considered a good use of scarce public money. “The budget cuts,” he wrote, “have directly reduced preparedness.”

In addition, the C.D.C., like many federal agencies, had its mission transformed after 9/11. Julie Gerberding, an appointee of the Bush administration, changed its emphasis to bioterrorism and other potential security threats. “She also brought in efficiency experts who were anathema to scientists,” says Laurie Garrett, a senior fellow for global health at the Council on Foreign Relations and the author of the seminal 1994 book, “The Coming Plague.” Morale plummeted, and many of its best scientists fled.

Fair enough. But it is also true that the C.D.C. was too hubristic in its approach to Ebola, and the consequence is that its staff now looks like bumblers. “They never challenged their own assumptions,” says Dr. Richard Wenzel, an infectious disease specialist at Virginia Commonwealth University. “This is an unforgiving virus,” he added, “about which there is a lot we don’t know.” The C.D.C.’s unfortunate habit of saying things as if they were certainties only to have to acknowledge that its judgment was questionable, says Wenzel, “can cause people to lose faith in the public health system.”

When you think about it, many of the Obama administration’s “scandals” have been failures of competence. The Secret Service let a man leap over the White House fence and get into the White House. The Veterans Health Administration covered up unconscionable delays in treating veterans. The error-ridden rollout of the Obamacare website was a nightmare for people trying to sign up for health insurance. The Republican right takes it as an article of faith that the national government can’t do anything right. Problems like these only help promote that idea.

And now comes the C.D.C. — the most trusted agency in government — thrust in a role for which it was designed: advising us and protecting us from a potential contagion. With every new mistake, it becomes, in the public eye, just another federal agency that can’t get it right.

Brooks and Krugman

October 17, 2014

In “The Case for Low Ideals” Bobo gurgles that the idealism of President Obama’s 2008 campaign seems foolish now, but idealism, a different kind, still has a place in American politics.  In the comments “Diana Moses” of Arlington, Mass. had this to say:  “I found myself trying to put my finger on why this column comes across to me as self-serving. I guess it sounds to me as though the writer is basically saying, “The system works for me, too bad if it doesn’t for you.” ”  Exactly.  It’s FYIGM.  Prof. Krugman, in “What Markets Will,” says the financial turmoil of the past few days, especially in Europe, has policy crusaders again sure that they know what the markets are asking for.  Here’s Bobo:

Let’s say you came of political age during Barack Obama’s 2008 campaign. Maybe you were swept up in the idealism. But now you’ve seen an election driven by hope give way to an election driven by fear. Partisans are afraid the other side might win. Candidates are pawns of the consultants because they’re afraid of themselves. Everybody’s afraid of the Ebola virus, ISIS and the fragile economy.

The politics of the last few years have made you disappointed, disillusioned and cynical. You look back at your earlier idealism as cotton candy.

Well, I’m here to make the case for political idealism.

I’m not making the case for the high idealism that surrounded that 2008 campaign. It was based on the idea that people are basically innocent and differences can be quickly transcended. It was based on the idea that society is easily malleable and it’s possible to have quick transformational change. It was based in the idea of a heroic savior (remember those “Hope” posters).

I’m here to make the case for low idealism. The low idealist rejects the politics of innocence. The low idealist recoils from any movement that promises “new beginnings,” tries to offer transcendent “bliss to be alive” moments or tries to fill people’s spiritual voids.

Low idealism begins with a sturdy and accurate view of human nature. We’re all a bit self-centered, self-interested and inclined to think we are nobler than we are. Montaigne wrote, “If others examined themselves attentively, as I do, they would find themselves, as I do, full of inanity and nonsense. Get rid of it I cannot without getting rid of myself.”

Low idealism continues with a realistic view of politics. Politics is slow drilling through hard boards. It is a series of messy compromises. The core functions of government are negative — putting out fires, arresting criminals, settling disputes — and much of what government does is the unromantic work of preventing bad situations from getting worse.

Politicians operate in a recalcitrant medium with incomplete information, bad options and no sleep. Government in good times is merely dull; when it is enthralling, times are usually bad.

So low idealism starts with a tone of sympathy. Anybody who works in this realm deserves compassion and gentle regard. The low idealist knows that rallies with anthems and roaring are just make-believe, but has warm affection for any politician who exhibits neighborliness, courtesy and the ability to listen. The low idealist understands that those who try to rise above the messy business of deal-making often turn into zealots and wind up sinking below it. On the other hand, this kind of idealist has a full heart for those who serve the practical work of legislating: James Baker and Ted Kennedy in the old days; Bob Corker and Ron Wyden today. Believing experience is the best mode of education, he favors the competent old hand to the naïve outsider.

The low idealist is more romantic about the past than about the future. Though governing is hard, there are some miracles of human creation that have been handed down to us. These include, first and foremost, the American Constitution, but also the institutions that function pretty well, like the Congressional Budget Office and the Federal Reserve. Her first job is to work with existing materials, magnify what’s best and incrementally reform what is worst.

The businessman might be enamored of disruptive change, but the low idealist abhors it in politics. The low idealist liked Obama’s vow to hit foreign policy singles and doubles day by day, so long as there is a large vision to give long-term direction.

The low idealist admires a different kind of leader; not the martyr or the passionate crusader or the righteous populist. He likes the resilient one, who maybe has been tainted by scandals and has learned from his self-inflicted wounds that his own worst enemy is himself.

He likes the person who speaks only after paying minute attention to the way things really are, and whose proposals are grounded in the low stability of the truth.

The low idealist lives most of her life at a deeper dimension than the realm of the political. She believes, as Samuel Johnson put it, that “The happiness of society depends on virtue” — not primarily material conditions. But, and this is what makes her an idealist, she believes that better laws can nurture virtue. Statecraft is soulcraft. Good tax policies can arouse energy and enterprise. Good social programs can encourage compassion and community service.

Low idealism starts with a warts-and-all mentality, but holds that people can be improved by their political relationships, so it ends up with something loftier and more inspiring that those faux idealists who think human beings are not a problem and politics is a mostly a matter of moving money around.

Of course Bobo’s crowd only wants it to move in one direction.  Welcome to the new Gilded Age.  Here’s Prof. Krugman:

In the Middle Ages, the call for a crusade to conquer the Holy Land was met with cries of “Deus vult!” — God wills it. But did the crusaders really know what God wanted? Given how the venture turned out, apparently not.

Now, that was a long time ago, and, in the areas I write about, invocations of God’s presumed will are rare. You do, however, see a lot of policy crusades, and these are often justified with implicit cries of “Mercatus vult!” — the market wills it. But do those invoking the will of the market really know what markets want? Again, apparently not.

And the financial turmoil of the past few days has widened the gap between what we’re told must be done to appease the market and what markets actually seem to be asking for.

To get more specific: We have been told repeatedly that governments must cease and desist from their efforts to mitigate economic pain, lest their excessive compassion be punished by the financial gods, but the markets themselves have never seemed to agree that these human sacrifices are actually necessary. Investors were supposed to be terrified by budget deficits, fearing that we were about to turn into Greece — Greece I tell you — but year after year, interest rates stayed low. The Fed’s efforts to boost the economy were supposed to backfire as markets reacted to the prospect of runaway inflation, but market measures of expected inflation similarly stayed low.

How have policy crusaders responded to the failure of their dire predictions? Mainly with denial, occasionally with exasperation. For example, Alan Greenspan once declared the failure of interest rates and inflation to spike “regrettable, because it is fostering a false sense of complacency.” But that was more than four years ago; maybe the sense of complacency wasn’t all that false?

All in all, it’s hard to escape the conclusion that people like Mr. Greenspan knew as much about what the market wanted as medieval crusaders knew about God’s plan — that is, nothing.

In fact, if you look closely, the real message from the market seems to be that we should be running bigger deficits and printing more money. And that message has gotten a lot stronger in the past few days.

I’m not mainly talking about plunging stock prices, although that’s surely telling us something (but as the late Paul Samuelson famously pointed out, stocks are not a reliable indicator of economic prospects: “Wall Street indexes predicted nine out of the last five recessions!”) Instead, I’m talking about interest rates, which are flashing warnings, not of fiscal crisis and inflation, but of depression and deflation.

Most obviously, interest rates on long-term U.S. government debt — the rates that the usual suspects keep telling us will shoot up any day now unless we slash spending — have fallen sharply. This tells us that markets aren’t worried about default, but that they are worried about persistent economic weakness, which will keep the Fed from raising the short-term interest rates it controls.

Interest rates on much European debt are even lower, because Europe’s economic outlook is so bad, and we’re not just talking about Germany. France is currently in conflict with the European Commission, which says that the projected French deficit is too big, but investors — who are still buying French bonds despite a 10-year interest rate of only 1.26 percent — are evidently much more worried about European stagnation than French default.

It’s also instructive to look at interest rates on “inflation-protected” or “index” bonds, which are telling us two things. First, markets are practically begging governments to borrow and spend, say on infrastructure; interest rates on index bonds are barely above zero, so that financing for roads, bridges, and sewers would be almost free. Second, the difference between interest rates on index and ordinary bonds tells us how much inflation the market expects, and it turns out that expected inflation has fallen sharply over the past few months, so that it’s now far below the Fed’s target. In effect, the market is saying that the Fed isn’t printing nearly enough money.

One question you might ask is why the market’s pro-spending, print-more-money message has suddenly gotten louder. My guess is that it’s mainly driven by events in Europe, where the slide into deflation and the growing public backlash against austerity have reached a tipping point. And it’s very reasonable to worry that Europe’s problems may spill over to the rest of us.

In any case, the next time you hear some talking head opining on what we must do to satisfy the markets, ask yourself, “How does he know?” For the truth is that when people talk about what markets demand, what they’re really doing is trying to bully us into doing what they themselves want.


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